Questions:

Prepare and submit a PowerPoint slide or Google Slide which diagrammatically captures the work paths, based on the Critical Path method and slide format shown in the lecture.

Guidelines:

1) Using color codes, mark the work paths, showing all the connections.

2) Make all the standard CPA calculations, including work-path times and float times. (See the lecture.)

3) Mark the critical path. How long will the project take?

4) On what day is the ship carrying the supplies and equipment expected to arrive on the island? On what day was the small airplane carrying first responders and first supplies expected to reach the island?

Delivering World-Class Health Care, Affordably

India might be the last place on earth where youd expect to find health care innovation. Government programs have finally brought some infectious diseases under control, but the nations ability to meet the basic medical needs of its citizens remains abysmal. Despite robust economic growth over the past two decades, the in- fant mortality rate is three times higher than Chinas and seven times greater than that of the U.S. Of the 2 million Indians in need of heart surgery, fewer than 5% get it. The majority of the countrys estimated 63 million diabetics and 2.5 million cancer sufferers havent been diagnosed, let alone treated. Seventy percent of Indias 12 mil- lion blind people could be cured by a simple surgeryif it were available to them.

Although India boasts 750,000 doctors and 1.1 million nurses, practitioner density is about one-fourth what it is in the U.S. and less than half that of China. Hospital beds are in short supply, and most medical facilities are dated, cramped, and often un- hygienic. In a country where the nominal per capita income is only $1,500 a year, pa- tients typically have to pay 60% of health care expenses from their own pockets. Still, Indians believe that good medical treat- ment is something everyone should have access to regardless of their ability to pay. Necessity spawns innovation. Despite the pressing demand and constrained sup- ply, a few relatively new Indian hospitals have devised ways of providing world- class health care affordablyand to scale.

THE GLOBE

These hospitals target well-off patients, which forces them to provide care that meets global quality standards. But their purpose is to serve everyone, including patients with very low incomes, which puts pressure on the organizations to lower costs dramatically. Such a business model scales because the low costs of these hos- pitals attract large volumes of patients and allow the overall enterprise to be profitable. As a result, the hospitals are able to sustain their operations not through the usual gov- ernment subsidies, charitable donations, or insurance reimbursements but through their revenues. Aravind Eye Care System, for instance, has paid for all its expansion projects from its profits, even though two- thirds of its patients receive free or subsi- dized care. These extraordinary private In- dian hospitals should serve, we believe, as an inspiration to those in other developing nations and as a wake-up call to hospitals in Europe and the United States. In fact, Americas health care system may soon find itself competing with one of Indias innovators. Building on the success of Indias medical tourism boom a $1 billion business that is growing by 30% a yearNarayana Health (NH) is open- ing a 2,000-bed multispecialty hospital in the Cayman Islands. A short hop from the American mainland, it will begin providing care in early 2014. Uninsured and underinsured patients will be able to receive high-quality treatment at an internationally accredited hospital for less than half of what they would pay in Amer- ica. The proximity of NHs beachhead may well pressure U.S. hospitals to develop the innovative practices and systems that we describe in this article. Indias Hospital Exemplars Two years ago, we kicked off a project to understand how some Indian hospitals are able to provide world-class health care at ultralow cost. We identified more than 40 hospitals with innovative strategies and selected nine of them for an in-depth study. Seven of the hospitals are for-profit and two, not-for-profit. Four focus on a single spe- 3 Harvard Business Review November 2013 cialty, and the other five are multispecialty institutions. Seven of the exemplars oper- ate as academic centers and integrate edu- cation and clinical research with health care delivery. We visited all the hospitals, gath- ered data, and conducted more than 100 interviews with the founding doctors, their leadership teams, physicians, staff, patients, and industry experts over several months. The Indian hospitals we studied treat medical conditions that range from prob- lems of the eye, heart, and kidney to ma- ternity care, orthopedics, and cancer. Their Innovation at Indian hospitals results not from a grand design but from constant experimentation, adaptationand necessity.

charges for most procedures are as much as 95% lower than those at U.S. hospitals. That isnt because the Indian providers offer low-quality services; five of the exemplars are accredited by either Joint Commission International (JCI), the international arm of the Joint Commissionan independent nonprofit that certifies the quality of more than 20,000 health care organizations in the U.S.or its Indian equivalent, the Na- tional Accreditation Board for Hospitals & Healthcare Providers, which uses stan- dards similar to those of JCI. A sixth is seek- ing accreditation and a seventh has chosen not to do so for fear that the process could stifle experimentation and curtail innova- tion. The other two are not big enough to seek accreditation yet. Some of these hospitalsfor instance, the Apollo Hospitals Groups flagship in Hyderabadhave recorded equivalent or better outcomes than the international standards for medical complications asso- ciated with knee, coronary, and prostate surgery as well as for infections related to the operating theater and catheters. NHs 30-day postsurgery mortality rate for coro- nary artery bypass procedures at its Ban- galore hospital is below the average rate recorded by a sample of 143 hospitals in Texas. Similarly, the five-year survival rate for breast cancer patients at HCG Oncology is comparable to U.S. benchmarks. Dec- cans five-year survival rate for peritoneal dialysis patients is the same as that for pa- tients in the U.S. undergoing hemodialysis, the more expensive treatment commonly used there. Rates of complications associ- ated with eye surgery at Aravind compare favorably with those of the best hospitals in the UKs National Health Service. How are some Indian hospitals able to provide such high-quality health care at ultralow prices? The obvious answerthe differential in the cost of labordoes play a role: Cardiothoracic surgeons, nephrolo- gists, ophthalmologists, and oncologists in India earn anywhere from 20% to 74% of what their American counterparts do. For instance, Aravinds ophthalmologists earn $50,000 annually compared with the $253,000 average for U.S. ophthalmologists. NHs cardiothoracic surgeons gross be- tween $150,000 and $300,000, whereas the median income for their U.S. counterparts is $408,000. And the salaries of nurses, medical staff, and administrators in India are dramatically lower; some earn only 2% to 5% of what a U.S. hospital would pay. But the labor cost differential is just a small part of the story. We calculated the price of an open-heart surgery at NH after adjusting the salaries of NHs doctors and other staff to match U.S. levels. Even with the higher wages factored in, the cost was still only 4% to 18% of a comparable pro- cedure in a U.S. hospital (see the exhibit Salaries Are Only Part of the Equation). Moreover, other costs in India are higher than in the United States. Equipment, such as MRI machines, and supplies, such as stents, are more expensive, and so are the costs of capital and urban land. As a result, NHs 21-point labor cost advantage rela- tive to the Cleveland Clinic, for example, is mostly offset by a 17-point disadvantage